What Is Geofencing? Location-Based Service for Advertising and Beyond

Is there any tool for cost-efficient and effortless delivery of target messages to people of specific demographics or locations who are highly likely to become your customers? The answer is yes: that is exactly what such a powerful geospatial tool as geofencing is used for. Simply put, geofencing is a virtual boundary around any point on the map. Customers within this boundary can be reached with messages.

Over thirty percent of businesses already use geolocation-based marketing services as a standard practice. Besides, over 80% of world’s population have location-enabled application and are ready to receive notifications from businesses like yours. Meanwhile, the market demand for geofencing technologies and solutions is growing.

The Active Geofencing Market is expected to reach USD 3039.38 million by 2026 and rise at a CAGR of 26.7% from 2021 through 2026.

So, what exactly is geofencing, and how does it work? And how can you apply it to your processes to enhance your business? Find the introduction to geofencing marketing in this article.

What Exactly is Geofencing?

Geofencing means using specialized software to draw a virtual boundary along a specific location. This location, also known as a geofence, can be any size, from a single construction to the entire city district.

When a location-enabled device crosses this boundary, it receives a trigger through Wi-Fi, GPS, radio frequency identification (RFID), or cellular data. The trigger may be an application push notification, email, social media ad, or a simple text message. Flash discounts, engagement features, security alerts — businesses are finding more and more creative ways of advertising to make use of these virtual boundaries. Now let’s consider in more depth what technologies serve to implement geofencing marketing.

How Geofencing Works?

A GIS specialist uses RFID- or GPS-enabled computer software to draw virtual lines specified by digital coordinates representing a specific physical area. Usually, it is a radius around a particular point or a polygon, including the exact spatial boundaries of a place, e.g., a jewelry store in a mall. Everything, from a small shop to an area bound by a zip code, can be a geofence.

Mobile app coding includes the pre-built geofences, which as a rule, should be accepted by the users. Users’ consent is a must for addressing privacy issues of location-based tracking. So, when users consent, the app enables location-based services. Location-enabled devices, namely mobile phones, smart wearables, or tablets, send signals — Wi-Fi, GPS, RFID, and cellular data. When they enter geofence, the geofencing technology picks up those signals.

The primary implementation area of this geospatial technology is geofencing marketing. Sending messages and push notifications to users inside a geofence to encourage a potential customer to make a purchase is the most common purpose of geofencing. But it is far from being limited to it. Other possible areas where geofencing helps to add value are tracking vehicles, items, or even people. It is also rapidly picking up speed in drones. And the number of use cases in various industries is only growing with the development of geospatial and tracking technologies. Let’s take a closer look at where geofencing is worth considering.

What is Geofencing Used for and Who Uses It?

The primary consumers of geofencing services are the retail chains, banks, agriculture holdings, logistics & shipping industry companies, small and medium businesses, and the government, which is actively implementing Smart Surveillance projects.

Here are the common geofencing use cases:

• Fleet Management. Geofencing is the easiest way of ensuring your vehicle is moving in the prescribed direction and detecting any diversions for the route. When a fleet crosses the defined region, digitally represented by a geofence, the managers receive a notification. They are ready to take the necessary measures to coordinate transportation and logistics operations.
• Retail Business. Retailers use geofencing as one of the main tools to improve customer experience. Navigation and product search, in-store geofencing, immediate special offers, and opportunities to leave customer feedback are effective measures to encourage buying behavior and grow customer retention. One of our clients, a UK award-winning Big Data & AI company, improved their retail business via shoppers’ behavior analysis inside malls and streets with precise geofencing.
• Agriculture. GPS trackers embedded in cattle collars or tags help watch if the cattle are leaving or entering a designated pen. Besides keeping track of livestock, geofencing allows agriculture businesses to plan crop placement and monitor farming conditions over vast land areas. In that way, geofencing is one of the critical aspects of intelligent farming.
• UAV / Drones. A person responsible for flying a drone receives a warning to deactivate it if it leaves or enters a particular area. That can be helpful for many industries where drones are used.
• Asset management. Geofencing helps track when a piece of asset leaves a specific location and restricts access if necessary. Geofencing also allows dividing the stock facility into unlimited virtual zones to zoom in and locate the correct item automatically.

6 Benefits of Geofencing

So, what are the benefits of geofencing? The significant advantage of using it is keeping track of activities in pretty much any area you want. And you can define that region as big or as narrow as you choose, frequently down to a single shop. By doing so, you may monitor only the locations that are critical to you and ignore those that are unnecessary for your objectives. That has significant effects on the advertising industry as well as various other niches and use cases. Below, we are highlighting the most notable benefits of geofencing:

• Quickly reaching your clients.
• The immediate impact on precisely targeted audiences.
• Increasing brand awareness and customer retention by enhanced customer experience.
• Extracting valuable insights from the gathered data on customer behavior.
• Keeping all things under control.
• Standing out among your competitors.

Wondering how to implement the benefits above of precise geofencing in your business? Let’s put your location to work together! Intetics has 27+ years of expertise in location-based services, from field data collection and geospatial data processing to forming dedicated teams aimed at turnkey GIS software development.

Geofencing Case Studies

1. Geofencing of 5 Billion Sq Ft for an International SaaS Developer to Create a Database of Retail Venues in the UK, US, Russia, Germany and Sweden
2. Precise Geofencing Improves Retail Business with Shoppers’ Behavior Analysis Inside Malls and on the Streets
3. Collecting, Updating, Filling and Maintaining the POI Database for a Global Navigation Corporation